Puerto Rico’s government power company said on Sunday it would move to cancel a $300 million repair contract with a tiny Montana company to restore power to the storm-hit US territory after an uproar over the deal.
The contract between Whitefish Energy Holdings and Puerto Rico’s bankrupt power utility has come under fire after it was revealed that the terms were obtained without a competitive public bidding process.
It also emerged that the company had only two full-time staff when it won the huge deal.
About 70 percent of the US territory remains without power more than a month after Maria struck on September 20 as a Category 4 storm with winds of up to 154 mph.
Earlier on Sunday, Puerto Rico’s Governor, Ricardo Rossello had called for the contract with Whitefish to be cancelled and Puerto Rico Electric Power Authority’s (PREPA) Director Ricardo Ramos said he had accepted the governor’s recommendation.
Mr Ramos said that he had to consider the “reputation risk” as well as “delay risk” in taking such a step, but noted that the initial enthusiasm from residents over Whitefish employees coming to the island had changed in the last several days after media started to report the details of the contract.
Mr Ramos said contract terms with Whitefish meant that the cancellation would become effective after 30 days’ notice and, signalling potential intricacies, explained that there were “a lot of logistics involved. I believe they have people on the way here.”
“The contract is not cancelled as of yet. I am writing today a letter to the board of directors of PREPA asking for a resolution that will allow me to cancel the contract,” he said.
He acknowledged that public perception had soured on how the contract was awarded.
“As soon as this whole issue was interpreted by the tabloids that PREPA has given away $300 million to a company with little experience; if you read that, and you have no light and no water, that perception changes abruptly to the extent that the last four days they’ve been throwing stones and bottles” at workers, he said.
Criticism increased after a copy of the contract with PREPA surfaced online on Thursday night and raised more questions, particularly over language blocking oversight of costs and profits.
Whitefish officials have said they secured the deal legitimately and would not oppose an audit of the company’s work. A Whitefish spokesman could not immediately be reached for comment after Sunday’s announcement.
Whitefish, which has a full-time staff of two people, says it has now more than 325 people on the island working to restore power.
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